Mandatory takeover order under Section 18FA leaves High Court limited discretion only on extension beyond five years.

Section 18FA(2) of the Industries (Development and Regulation) Act, 1951 is construed as mandatory once the Central Government forms the requisite opinion and makes an application. The High Court is then bound to issue the takeover order empowering authorisation of a person or body to manage the industrial undertaking, and its discretion is limited to extension beyond the initial five-year period under the proviso. A preliminary objection based on the form of the application was rejected as a matter of substance, not jurisdiction. The result is that the takeover application was maintainable and relief had to be granted within the statutory limit.

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Issues: Whether, on the Central Government forming the requisite opinion and making an application, the High Court was bound to make an order under section 18FA of the Industries (Development and Regulation) Act, 1951, or whether it retained a discretion to refuse the order.

Analysis: The statutory language of section 18FA(2) was construed as mandatory. Once the requisite governmental opinion had been formed and an application made, the Court held that it was bound to pass an order empowering the Central Government to authorise a person or body of persons to take over management of the industrial undertaking for the prescribed period. The discretion contemplated by the provision was confined to the proviso relating to extension beyond five years. The preliminary objection as to the form of the application was rejected as a matter of form, not substance, and not affecting jurisdiction.

Conclusion: The application was maintainable and the Court was required to grant the requested relief under section 18FA(2), subject to the statutory limit of five years.

Final Conclusion: Permission was granted to authorise takeover of management of the industrial undertaking, and directions were issued for handing over possession through the official liquidator in accordance with the statute.

Ratio Decidendi: Where the statutory preconditions under section 18FA are satisfied, the word "shall" imposes a mandatory obligation on the High Court to make the takeover order, leaving discretion only for extension beyond the initial statutory period.

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